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South Asia Investor Review is focused on reporting, analyzing and discussing the economy and the financial markets of countries in South Asia, including Pakistan, Bangladesh and Sri Lanka. For investors looking to invest in emerging markets beyond BRIC countries (Brazil, Russia, India and China), this blog is designed to help international investors looking to learn about investing in South Asia with focus on Pakistan. Riaz has another blog called Haq's Musings at http://www.riazhaq.com

Pakistan's Sugar Crisis and Dietary Habits

World raw sugar futures hit a 28-year high of 23.52 cents a pound last week as the fears of a bad sugarcane harvest grew stronger. The key background factor is the continuing scarce supply scenario in the global market because of weather factors, particularly in India, the second largest producer of sugarcane, according to the Wall Street Journal. While India is dealing with too little monsoon rain, the largest sugar producer Brazil is being hurt by too much rain.

At 4.89 million tons of annual sugar production, Pakistan is the tenth largest sugar producer in the world, and yet it has to import sugar, exposing it to the effects of sugar shortages and rising prices in the world. Pakistanis consume over 25 Kg of sugar per person versus India's 20Kg. Sugar cost Rs 25 per Kg (30 US cents) at the start of 2009 and now costs more than Rs 50, says independent economic analyst A.B. Shahid. This doubling of the price is likely to further enrich the large number of sugar producing politicians who are already rich and powerful.

The most pessimistic estimates show a 23 percent decline in sugar crop production this year. While last year Pakistan produced 4.7 million tons, farmers are on track to produce 3.2 million tons this year. That means a severe shortfall as annual national consumption is 4.2 million tons.

Both sugar production and per capita consumption as well as overall calorie intake have been rising in Pakistan. In the last four decades, per capita calorie intake in Pakistan has grown from 1750-2450 (kilo)calories with an average annual growth rate of 0.90%. Nevertheless, 20% of Pakistan's population is still undernourished. Sugar consumption has been showing an increasing trend for the last 15 years. It has increased from 2.89 million tons in 1995-96 to 3.95 million tons in 2005-06. One of the many reasons behind this increase is rise in the total population of the country, which has reached 170 million. The per capita sugar consumption data shows that it has also risen from 22.2 kg in 1995 to 25.8 kg in 2004-05. For 2008-09, the overall sugar consumption is forecast at over 4 million tons, which is less than the target production. But the government is importing about 300,000 tons of sugar to ensure availability of sufficient stock to cover any shortfalls from the usual smuggling to Afghanistan which remains a fact of life in Pakistan.

In addition to relatively large per capita sugar consumption, Pakistanis also consume significantly higher amounts of meat, poultry and milk products than other South Asian nations, getting more protein and almost half their daily, per capita calorie intake from non-food-grain sources.

The fact that Pakistanis have a sweet tooth is not lost on the nation's ruling elite, particularly the powerful political families and the Pakistani military. While the military owns Fauji sugar mills, more than 50% of the sugar in Pakistan is produced in sugar mills owned by the most powerful politicians of all major parties and their families.

The media reports also indicate Kamalia Sugar Mills and Layyah Sugar Mills are owned by PML-N leaders. Former minister Abbas Sarfaraz is the owner of five out of six sugar mills in the NWFP. Nasrullah Khan Dareshak owns Indus Sugar Mills while Jahangir Khan Tareen has two sugar mills; JDW Sugar Mills and United Sugar Mills. PML-Q leader Anwar Cheema owns National Sugar Mills while Chaudhrys family is or was the owner of Pahrianwali Sugar Mills as it is being heard that they have sold the said mills. Senator Haroon Akhtar Khan owns Tandianwala Sugar Mills while Pattoki Sugar Mills is owned by Mian Mohammad Azhar, former Governor Punjab. PML-F leader Makhdoom Ahmad Mehmood owns Jamaldin Wali Sugar Mills. Chaudhry Muneer owns two mills in Rahimyar Khan district and Ch Pervaiz Elahi and former Minister of State for Foreign Affairs, Khusro Bakhtiar have shares in these mills.

Among other basic food commodities, per million population wheat consumption in Pakistan is 115,000 metric tons versus 63,000 metric tons in India, according to published data.

According to the FAO, the average dairy consumption of the developing countries is still very low (45 kg of all dairy products in liquid milk equivalent), compared with the average of 220 kg in the industrial countries. Few developing countries have per capita consumption exceeding 150 kg (Argentina, Uruguay and some pastoral countries in the Sudano-Sahelian zone of Africa). Among the most populous countries, only Pakistan, at 153 kg per capita, has such a level. In South Asia, where milk and dairy products are preferred foods, India has only 64 kg and Bangladesh 14 kg. East Asia has only 10 kg.

While it remains very low by world standards, meat and poultry consumption has also increased significantly in Pakistan over the last decade. Per capita availability of eggs went from 23 in 1991 to 43 in 2005, according to research by N. Daghir. Per capita meat consumption in Pakistan now stands at 12.4 Kg versus India's 4.6 Kg.

In spite of South Asia's growing horticulture industry, the intake of fruits and vegetables in India and Pakistan is surprisingly low at less than 100 grams per day per capita, according to the World Health Organization. This figure is far lower than the 300 grams of fruits and vegetables per person in Australia, EU and the US. In spite of the fact that there is about 22% malnutrition in Pakistan, the average per capita calorie intake of about 2500 calories is within normal range. But the nutritional balance necessary for good health appears to be lacking in Pakistanis' dietary habits. One way to alleviate the sugar crisis in Pakistan is to reduce sugar consumption and substitute it with greater intake of fruits and vegetables. There is an urgent need for better health and nutritional education through strong public-private partnership to promote healthier eating in Pakistan.

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How many hundreds of millions of poor Indians are there? asks the NY Times:

Nobody can argue that India has hundreds of millions of poor people and that the government should help them. What remains a matter of significant dispute, however, is just how many poor people there are in India.

The government Planning Commission estimates that 27.5 percent of the country’s population lives below the poverty line, which is calculated based on how much it would cost to buy 2,400 calories a day in rural areas and 2,100 in urban areas. (City dwellers are thought to exert less energy, so they should need to consume less.)

Many have challenged the way India measures poverty. The latest complaint came last week when a commission appointed by the country’s Supreme Court said the number of people living in poverty is probably at least 50 percent, because it asserts that the Planning Commission poverty line has been wrong for years because it does not properly adjust for the rise in food prices.

The difference is not merely technical.

A high poverty line means that the federal government has to give state governments more money for various anti-poverty programs. Even the prime minister, Manmohan Singh, acknowledged recently that higher measures of poverty could be tough on government finances, which are already severely strained.

Regardless of whether or not people can buy the requisite calories, data from a national survey taken every five years shows that most Indians are indeed not consuming 2,400 (or 2,100) calories each day, and many are now consuming less than they used to 10 years ago. The poorest 25 percent of Indians now consume 1,624 calories, from 1,683.

Moreover, most of the calories consumed by the poor come from cereals, whereas the diet of the rich includes more meat, vegetables, fruit and other foods with higher nutritional value.

Perhaps even more distressing is the finding by the Supreme Court panel that more than half of the country’s poorest 20 percent of people do not have the cards that identify them as poor and are necessary to access public welfare plans. At the same time, about 17 percent of the richest Indians have such cards.

1 Dairy SectorWith an estimated 33 billion litres of annual milk production from 50 million animals, managed byover 8 million farming households, Pakistan is the 5th largest milk producing country in the worldLivestock sector contributed approximately 53.2 percent of the agriculture value added and 11.4percent to national GDP during 2009 – 10The milk economy in terms of value is over 27% of the total Agriculture sectorAdditional potential of 3 billion litres of milk, with a growth rate faster than any other sectorOf the total 33 billion litres of milk produced, 71% is rural based and 29% is urban basedOf the total production, around 3% is processed and marketed through formal channels40% Supply and Demand gap exists in Pakistan.

2 Livestock SectorLivestock sector contributed approximately 53.2 percent of the agriculture value added and 11.4percent to national GDP during 2009?10.Gross value addition of livestock at current factor cost has increased from Rs. 1304.6 billion(2008?09) to Rs. 1537.5 billion (2009?10) showing an increase of 17.8 percent as compared to theprevious year.The population growth, increase in per capita income and export revenue is fuelling the demand forlivestock and livestock products.Pakistan earned USD717 million from leather exports in FY09 and a meagre USD96 million from meatexports.Poultry sector is one of the organized and vibrant segments of agriculture industry of Pakistan.This sector generates employment (direct/indirect) and income for about 1.5 million people.Poultry meat contributes 23.8 percent of the total meat production in the countryThe meat demand for Pakistan Domestic market is growing at a rate of 2.73% for Beef, 2.90 % formutton and 6.10 % for poultry.This domestic demand is growing to meet the population growth, human need for protein andcalcium, migration of population from rural to urban and the fluctuating growth due to per capita risein income.-------3 Fisheries Sector

During the period July?March 2009?10 the total marine and inland fish production was estimated952,735 Million tons out which 667,762 Million tons were marine production and the remaining catchcome from inland waters.A number of sites have been earmarked on an area of 20,000 acres of land in Districts Thatta &Badin along the coast.Immense potential exists to start commercial scale fish/shrimp farming in Sindh.

4 Poultry SectorPoultry is an important sub – sector of agriculture and has contributed enormously to food production byplaying a vital role in the domestic economy. Poultry industry can broadly be divided into threegroups, viz. hatchery, poultry farming and feed sectors. This sector generates employment and incomefor about 1.5 million people in Pakistan. Its contribution in agriculture growth is 4.81% and in Livestockgrowth is 9.84%, whereas, the total poultry meat contributes to 23.8% of the total meat production inthe country.Pakistan, with a population of 170 Million people, has gone through a sizeable growth in the productionof poultry meat and eggs. Per capita availability went up from 23 in 1991 to 46 eggs in 2009 and poultrymeat availability increased from 1.48kg to 2.88 kg during the same period. In our Country per capitaconsumption of meat is only 7 KG and 60-65 eggs annually. Whereas developed world is consuming 41KG meat and over 300 Eggs per capita per year. According to Industry sources there is capacity of 5,000Environmental Control Houses in Pakistan and currently only 2,500 houses are working.The total Poultry population in Pakistan is approximately 610 Million.

Pakistani millers are seeking permission from the government to export up to 500,000 tonnes of refined sugar as they are expecting bumper production, according to Dawn news:

Pakistan’s annual sugar consumption is about 4.2 million tonnes, and export of the sweetener has been banned for nearly three years due to reduced output. But this year, the country is expecting about 5 million tonnes from the 2011/12 crop, with carryover stocks of up to 600,000 tonnes, Javed Kayani, chairman of the Pakistan Sugar Mills Association (PSMA), told Reuters.

“Even after meeting domestic needs and maintaining strategic stocks, Pakistan could still export up to 500,000 tonnes of refined sugar, and there will be no shortage in the country,” Kayani said.

“This will also help us make payments to growers and meet our financial obligations in time, as the government is delaying a decision to buy sugar from local mills,” he added.

Government officials were not immediately available to comment.

The state-run Trading Corporation of Pakistan (TCP) on Friday re-issued a tender to buy 200,000 tonnes of white sugar from local mills in a bid to cut cost after domestic prices fell in recent weeks to around 55 rupees ($0.61) per kg from about 70 rupees in November.

The tender was originally issued on Nov. 3. The government buys sugar every year for its strategic reserves and for its subsidy scheme. A growers’ body, Agri Forum Pakistan, has asked the government to either buy sugar from local mills or allow them to export so that they can pay outstanding dues to farmers.

If exports are allowed, Pakistani sugar would add to plentiful global supplies.

ICE raw sugar futures slipped to a 6-1/2-month low on Thursday. March white sugar futures on Liffe lost $1.40 to finish at $596.30 per tonne in modest volume of around 3,550 lots.

Pakistan had to import about 1.2 million tonnes of sugar last year after production fell to 3.1 million tonnes from the 2009/10 crop, when many farmers switched to more profitable crops.

The country, however, produced, 4.1 million tonnes of refined sugar in 2010/11 (July-June) year despite devastating floods in 2010.

ISLAMABAD, (Asia Pulse) - Pakistan's exports of food commodities surged by 22.73 percent during the first five months of the current fiscal year to reach at $1.514 billion, Federal Bureau of Statistics (FBS) reported.The overall food exports were recorded at 1.514 billion during July-November (2011-12) as compared to the exports of $1.233 billion during July-November (2010-11), according to FBS figures issued.

The food products that contributed to positive growth included fish and fish preparations, exports of which increased from $106.742 million last year to $125.959 million during the first five months of this year, showing an increase of 15.83 per cent.

Exports of fruits also increased by 13.94 per cent from $77.753 million to $88.595 during the period under reviews, showing positive growth of 13.94 per cent, the data revealed.

Exports of vegetables and tobacco increased by 28.47 percent and 27.62 per cent respectively during the period under review.

During the month of November 2011, the food exports witnessed negative growth of 25.85 per cent and 6.93 per cent when compared to the exports of October 2011 and November 2010 respectively.

The overall food exports during November 2011 were recorded at $223.360 million against the exports of $301.246 million in October 2011 and $239.984 million in November 2010, the data revealed.

Pakistan produces 13.67 million tones of fruits and vegetables per annum, according to Online News:

An official told Online on Tuesday out of which about 25 per cent goes waste, between farms to consumers, while only 4 per cent is exported at far 41 per cent lower price compared to world average price.

The horticulture sector contributes about 12 per cent to the national agricultural Gross Domestic Product (GDP) and holds great potential for increasing export of quality horticultural produce, and offering multiple employment opportunities throughout the supply chain, he added.

The official said, “However, its growth & profitability is restrained mainly by lack of proper post harvest management and transport infrastructure. Improving post harvest management infrastructure (grading, packing, storage and transport/cold-chain) will help reduce high post harvest losses, increase production surplus along with improving shelf life and quality of fresh produce, which will help to stabilize prices in domestic markets as well as to substantially boost export to highly lucrative and competitive international markets.”

It is pertinent to mention here that Ministry of Commerce had decided to establish a “Cool Chain System” under “National Trade Corridor Improvement Project”. The Cool Chain project is bound act as a backbone for the development of supply chain infrastructure for horticulture produce.

"As the green revolution tapered off, a poultry revolution began; in the late 1970s. Ever since, Pakistan has been gnawing away at broiler chicken and there’s no turning back", wrote Punjab's director general of board of investments in a recent Op Ed in Dawn.

In the 1960’s and 1970’s, obtaining safe, reliable sources of poultry feed was an insurmountable challenge in Pakistan. This led Khalil to set up his own feed mill to produce feed for K&N’s operations at Karachi in 1971. With the growing need of feed for the integrated production operations in Central Punjab province and Northern areas of the country, a feed mill established by a multi-national company at Lahore, was acquired by K&N’s to take advantage of low-cost feed ingredients available in the Central part of Pakistan.

The growth of commercial poultry production through the decades changed the mindset of consumers towards farm raised broilers and eggs, helped by lower prices and greater availability. Today, Desi chicken and eggs are produced in lower volumes and considered more of a delicacy.

Yet the strength of the live/wet chicken market culture, the negligible overheads of roadside sales – a butcher’s knife costs less than US$1 – and the reassurance of Halal slaughter remain significant influences slowing the uptake of processing, says Adil Sattar.

Practical problems, particularly the limited availability of cool chain facilities and frequent power breakdowns, have to be overcome with production and distribution of processed products inevitably involving high overheads.

"Earlier, within our industry, poultry processing was considered a non-viable poultry business activity as many firms had tried but ended up closing down their operations," says Adil. "At K&N’s, we endeavoured to develop the market, and other companies are now looking to start processing operations."

Today, chicken is the most popular protein source in Pakistan, primarily through the industry’s growth and success leading to lower cost and widespread availability, with per-capita consumption about 7kg (15.4lb) per year. The tradition is to eat chicken at home, always skinless cooked in curries, with rice or barbecued.

Restaurants offer local cuisine including a variety of curries, barbecue dishes and different types of rice, with a number of upmarket cafes and restaurants serving western cuisine and many of the international fast food caterers such as McDonald’s, KFC, Pizza Hut, Nando’s, Hardees and Subway also present.

"As the green revolution tapered off, a poultry revolution began; in the late 1970s. Ever since, Pakistan has been gnawing away at broiler chicken and there’s no turning back", wrote Punjab's director general of board of investments in a recent Op Ed in Dawn.

In the 1960’s and 1970’s, obtaining safe, reliable sources of poultry feed was an insurmountable challenge in Pakistan. This led Khalil to set up his own feed mill to produce feed for K&N’s operations at Karachi in 1971. With the growing need of feed for the integrated production operations in Central Punjab province and Northern areas of the country, a feed mill established by a multi-national company at Lahore, was acquired by K&N’s to take advantage of low-cost feed ingredients available in the Central part of Pakistan.

The growth of commercial poultry production through the decades changed the mindset of consumers towards farm raised broilers and eggs, helped by lower prices and greater availability. Today, Desi chicken and eggs are produced in lower volumes and considered more of a delicacy.

Yet the strength of the live/wet chicken market culture, the negligible overheads of roadside sales – a butcher’s knife costs less than US$1 – and the reassurance of Halal slaughter remain significant influences slowing the uptake of processing, says Adil Sattar.

Practical problems, particularly the limited availability of cool chain facilities and frequent power breakdowns, have to be overcome with production and distribution of processed products inevitably involving high overheads.

"Earlier, within our industry, poultry processing was considered a non-viable poultry business activity as many firms had tried but ended up closing down their operations," says Adil. "At K&N’s, we endeavoured to develop the market, and other companies are now looking to start processing operations."

Today, chicken is the most popular protein source in Pakistan, primarily through the industry’s growth and success leading to lower cost and widespread availability, with per-capita consumption about 7kg (15.4lb) per year. The tradition is to eat chicken at home, always skinless cooked in curries, with rice or barbecued.

Restaurants offer local cuisine including a variety of curries, barbecue dishes and different types of rice, with a number of upmarket cafes and restaurants serving western cuisine and many of the international fast food caterers such as McDonald’s, KFC, Pizza Hut, Nando’s, Hardees and Subway also present.

The country will produce 4.735 million tonnes of sugar in the crushing season of 2011-12 and the carryover stock of 0.5 million tonnes of sugar will take the total to 5.2 million tonnes. Pakistan Sugar Mills Association (PSMA) members stated this during a meeting of the Sugar Advisory Board held in the Ministry of Industries, which was chaired by the Ministry of Industries additional secretary on Monday.

Trading Corporation of Pakistan chairman, Punjab Food secretary, representatives of Cane Commissioners of Punjab, Sindh and Khyber Pakhtunkhwa, State Bank of Pakistan officials, PSMA members and representatives of the sugarcane growers associations attended the meeting. The representatives of the provinces provided the meeting with the statistics about the sugar produced and the estimated production in this crushing season which will end by around March 20 in Northern Punjab and KP and by March 25 in Southern Punjab and Sindh.

It was informed that Punjab has crushed 2.7 million tonnes of sugar, Sindh 1.027 million tonnes and KP 0.275 million tonnes. Representatives of the PSMA informed that the keeping in view the current average daily production of sugar and the sugarcane available with the growers, Punjab is expected to produce 3.1 million tonnes of sugar, Sindh 1.26 million tonnes and KP 0.375 million tonnes.

The association suggested that the government should procure 0.4 million tonnes of sugar from the domestic market instead of importing the sugar at a higher price. The ministry said that the recommendations of this meeting would be discussed at the higher forum for further decision.

The government intends to export 400,000 tons of surplus sugar and believes that the performance of the agricultural sector is improving despite natural calamities.

“The good news about surplus sugar was given to President Asif Ali Zardari during a meeting at the presidency by a delegation of the Pakistan Sugar Mills Association led by its chairman Javed A. Kayani,” president’s spokesman Farhatullah Babar said on Thursday.

The PSMA chief said sugar production stood at about 4.7 million tons. After meeting the domestic requirement of 4.2 million tons, about 400,000 tons of sugar is available for export. “Export will enable mill owners to make payments to growers in Khyber Pakhtunkhwa, Punjab and Sindh,” he said.

Sources in the agriculture sector said the country was exporting wheat and rice and sugar would be the third major commodity to be exported. They said the Punjab government was already exporting wheat and the centre was sending the surplus crop to Iran.

President Zardari expressed satisfaction over the sugar production and said: “It is a matter of great satisfaction that despite unprecedented natural calamities the country is not only in a position to meet its requirements but is also poised to export sugar.”

He said the government was committed to working in consultation with the sugar industry to solve its problems. “Only through the pro-active involvement of the business community and industrialists, the continuity of policies could beensured,” the president was quoted as saying.

He advised the government to hold a meeting with the PSMA so that its proposal to export sugar could be sent to the Economic Coordination Committee of the cabinet for consideration.

There's a report in ET claiming research at UAF that Pakistanis are now 4 in shorter than in 1960s.

This finding does not appear to be credible.

All anecdotal evidence suggests that most Pakistani children are growing up to be taller than their parents. All one has to do is keep one's eyes open & observe.

The average height in Pakistan of 20 yrs old males is now 5' 6" vs 5' 4" in India. If one is to believe this "research", then one must also believe that the avg height in Pakistan in 1960s was 5' 10'' which is simply untrue based on all known evidence, anecdotal or otherwise.

In addition, if worsening malnutrition were indeed an issue, the life expectancy in Pakistan would not have doubled since independence. Published data shows that life expectancy in Pakistan has jumped from 32 years in 1947 to 67 years in 2009, and per Capita inflation-adjusted PPP income has risen from $766 in 1948 to $2603 in 2009.

Pakistanis consume over 170 Kg of milk per capita and it's growing, according to FAO.

http://www.fao.org/ag/againfo/programmes/en/pplpi/docarc/wp44_3.pdf

Growing milk consumption can help reduce malnutrition in Pakistan.

Here's a story illustrating the value of milk in reducing malnutrition in Africa:

WFP Executive Director Josette Sheeran kept a promise she made to WFP-supported Rilima health centre last July by giving two cows worth 1,360,000 Frw to help reduce malnutrition among poor communities in the area.

WFP Executive Director Josette Sheeran kept a promise she made to WFP-supported Rilima health centre last July by giving two cows worth 1,360,000 Frw to help reduce malnutrition among poor communities in the area.

The milk produced by the cows will be used to feed severely malnourished children and breast feeding mothers. “The health centre expects to get 50 litres of milk to feed over 200 malnourished children per day,” says Pascal Habyarimana assistant director of the health centre.Rilima nutrition centre assists more than 37,000 people in the area. WFP provides monthly fortified supplementary food to malnourished children under the age of five years and malnourished pregnant or nursing women.

“Since 2009, more than 20,000 malnourished children have been supported and recovered from malnutrition", says WFP Rwanda Country Director Abdoulaye Balde. "WFP will continue to provide relevant suport to reduce malnutrition among poor communities in Rilima sector”.Parents and nursing women come to the centre not only to collect fortified food provided by WFP but also to be trained on good nutrition practices. Training is focused mainly on balanced meals, hygiene, disease prevention and family planning.The idea is that, after receiving assistance from nutritoon centres, parents can become agents for change in their communities with the help of a a trained community health worker.

Local mothers are currently learning how to organize vegetable gardens at home. A garden can be established on a small plot and maintained with waste water from the kitchen. The nutrition centre itself has a model garden and vegetables from it are used for cooking demonstrations.In partnership with World Vision and Rilima health centre, beneficiaries are encouraged to develop good cooking practice at home and share them with their neighbours.

Here's a Bloomberg story on Pakistan govt's politically motivated decision to export more sugar:

A shipping subsidy and lower excise tax linked to the export of as much as 1.2 million metric tons of sugar by Pakistan may lead to low inventory and high domestic prices, a unit of the U.S. Department of Agriculture said.

The decision by Pakistan’s Economic Coordination Committee of the cabinet and the Federal Board of Revenue “is being heavily criticized as a politically motivated move by the government to garner support from the sugar industry in the upcoming elections,” the USDA’s Foreign Agricultural Service said in a report posted today on its website.

Stockpiles may drop to a “precariously low level” of 400,000 tons, down from an average of 1 million tons in the past five years, according to the report.

On March 6, the coordination committee approved an inland freight subsidy of about $18 a ton on exports of as much as 1.2 million tons after previously setting the quota at 895,000, according to the report. The federal excise duty on domestic sales was lowered to 0.5 percent from 8 percent to provide an increased incentive to export, according to the report.

“The government efforts to increase the competitiveness of Pakistani sugar in the international market by means of providing direct payment to millers for export could be a violation” of World Trade Organization obligations under an agriculture accord, according to the report.

The government of President Asif Ali Zardari became the first civilian administration to complete its full term. General elections are scheduled for May.

Highlighting various activities, HP Cogen-Pak Project Director Omar Malik said the programme is currently working in collaboration with 35 sugar, 14 financial institutions and five technology providers, while seven bankable feasibility studies are already under way. Assessment for the pipeline and capacity building of Pakistani boiler manufacturers is also expected to start in December this year.While talking to The Express Tribune, Malik said that it is to promote sustainable production of energy for export of surplus electrical power to the national grid through replication of existing technologies in the sugar sector.“We are also trying to mobilise relevant public sector authorities for the formulation of a regulatory regime for bagasse based power projects,” he said. “Training of technical staff of sugar mills on standardised design and technology selection is also part of the process.”The event was attended by representatives of the Ministry of Water and Power, National Electric Power Regulatory Authority, Private Power Infrastructure Board, Alternative Energy Development Board, State Bank of Pakistan, Climate Change Division, Pakistani boiler manufacturers and sugar mill representatives.Pakistan’s sugar sector has an annual availability of 4.4 million metric tons of bagasse, sugar mill waste.To generate heat and electricity for its energy needs, sugar sector is using inefficient low pressure cogeneration system, consuming 46% more bagasse compared to the High Pressure Cogeneration.

KARACHI: The National Electric Power Regulatory Authority (Nepra) has awarded licences to two sugar mill-owners for setting up bagasse-based power generation in Sindh with a cumulative capacity of 45MW, officials said on Thursday.

The licences have been issued to Mehran Sugar Mills Limited for its 14.06MW bagasse-based generation facility in Tando Allahyar and Alliance Sugar Mills (Pvt) Limited for its 30MW co-generation plant in Ghotki, they said.

The Economic Coordination Committee (ECC) of the Cabinet in its meeting held on March 6, 2013, had approved the framework for power co-generation 2013 bagasse and biomass, as an addendum to the Renewable Energy Policy 2006.

This framework is effective for all high pressure co-generation projects, utilising bagasse and biomass, the officials said.

The National Electric Power Regulatory Authority had already approved Rs10.50 per unit as the upfront tariff for the power generation through sugar mills by utilising sugarcane bagasse.

This upfront tariff has been approved to encourage sugar mills to generate around 1,500MW on fast-track basis.

At present, hydel generation is costing Rs2.50 per unit, generation through natural gas is costing around Rs5 per unit, thermal generation from Rs14 to Rs18 per unit and electricity generated through diesel is costing Rs23 to Rs28 per unit, the officials said.

The approval of the upfront tariff for sugar mills will encourage them to plan their investment in this new sector for steering the country out of the power crisis, the officials said, adding, the government plans to generate around 3,000MW cheaper electricity through sugarcane bagasse on fast-track basis and investors will be facilitated and encouraged.

Necessary amendments will also be made to the existing co-generation and renewable energy policies to make it simplified and investor-friendly, they said.

Pakistan is the fifth largest producer of sugarcane with the production of 50 million tons of sugarcane annually, yielding over 10 million tons of bagasse.

Power generation from bagasse will not only reduce the furnace oil import, but also save Rs33 billion to Rs49 billion worth of foreign exchange per annum, the officials said.

The country has 87 sugar mills with the capacity to generate 3,000MW from bagasse in winter season.

As in most debates in Pakistan there are sharply polarised views on the regulation and deregulation of private-sector activities. Some advocate re­gulation by the state as an effective tool to curb the market’s excesses. Others think markets should be left to themselves and the state should have few regulations.

------.

Financial markets have some unique features that are missing in product and factor markets. This distinction is lost sight of in this polarised debate. Shareholders’ equity in bank balance sheets ranges from 8pc to 10pc. The banks are highly leveraged as they raise 90pc to 92pc of their money from depositors and borrowings from other financial institutions and markets. This high leverage effect magnifies both upside gains and downside risks, inducing the bank management, whose compensations are linked to short-term profits, to resort to excessive risk-taking.

The upside gains of the leveraged bets accrue mainly to shareholders and managers, while downside losses are so heavy that the state has to bail them out using taxpayers’ money. This asymmetric treatment of the risks incurred and the accrual of rewards places a heavy responsibility on regulators to ensure that shareholders, and not taxpayers, bear the brunt of excessive risk-taking. Therefore, given the market’s structure in the financial sector, state regulation is not only justifiable but desirable.---------

The same logic cannot be applied to the market for goods and inputs. If a farmer’s income is determined by forces outside his control he has no incentive for higher production and improved productivity. In Pakistan, the government controls wheat prices, and fertiliser prices are subsidised, largely benefiting big farmers. Irrigation water is allocated in a discriminatory manner inducing inefficiency. The food department procures wheat at official prices from those who are influential or who grease their palms. Under such stringent price and quantity regulation why should the average farmer maximise his efforts to produce more?

The differential in the yield between a progressive and an average farmer ranges between 50pc to 70pc. If there was deregulation of prices and quantity (except for a certain amount of reserves), wheat production could jump to at least 30 million tons — a conservative estimate.

Contrast this with the deregulated milk market. Except for hygiene regulations, milk supply and demand determine the prices. The fastest growth in the average farmer’s cash income has taken place through money from milk. For other non-cereal products, market committees that are inefficient and operate in collusion with officials of the agriculture department have distorted prices.

--------The sugar market has, at different times, faced waves of regulation, fixed cane price and opaque market interventions. The government steps in when there is surplus production; it procures from local sugar mills and sells in international markets at loss.

In times of shortages, the government imports sugar, and sells at a price mostly to the mills’ advantage. Efficient and inefficient mills are treated equally; there is no pressure on the latter to exit the market as they are insulated from facing the market test. Thus over-regulation, procurement by the government at non-market prices and intrusive and discriminatory practices have tilted the sugar market against the consumers. Here deregulation is badly needed.

In the manufacturing sector, as many as 40 agencies and departments of the federal, provincial and local governments are involved in giving clearances, no-objection certificates, grants of permits, licences, etc. Most factory owners have reconciled to this situation, making monthly payments to functionaries of these departments commensurate with their nuisance value. A labour inspector can arbitrarily shut down a factory, causing enormous loss to the owners, for whom the easy course is to keep the inspector contented.

It would also give rival producers such as Pakistan, Thailand and Brazil the chance to boost shipments from their ports. "India will need to import next year due to a production shortfall," Ashok Jain, president of the Bombay Sugar Merchants Association (BSMA), told Reuters.

"Drought has severely affected cane plantations in Maharashtra. The government should stop exports now to reduce import requirements in the next season."

The El Nino weather phenomenon, which brings dry conditions to many regions, has stoked the worst drought in decades in some parts of India, with thousands of small-scale sugar cane growers in Maharashtra state failing to cultivate crops for the next marketing year, starting October.

"Even for drinking water we are relying on water tankers. It wasn't possible for anyone from our village to cultivate cane," said Baban Swami, a farmer standing in a parched field in the Latur district of Maharashtra, around 500 km southeast of Mumbai.

A majority of sugar mills in the Sindh province belongs to one man, whether a single proprietor can set up such a big number of mills, the opposition asked the treasury benches during the Sindh Assembly session on Tuesday.

"A majority of sugar mills belongs to Anwar Majeed in the province and how many mills one person can set up," Pakistan Muslim League (PML-F) woman lawmaker Nusrat Sehar Abbasi asked to Sindh Industries Minister Muhammad Ali Malkani during a questions-answers session.

Replying to the question, the minister said that "anyone can establish as many mills he wants and there is no bar if anyone intends to set up 100 mills he can", adding that the Sindh government issued the required NOC to applicants.

"There are 35 sugar mills in the province," he told the house, saying that "the department easily issues NOC to applicants to set up a new mill". In 2013, he said the Sindh government had allocated Rs270.30 million to revamp roads infrastructure in SITE Industrial Area in Karachi.

Through the allocation, he said, 14.2 kilometres of roads network, roadside gutters and other communication and civic infrastructure had been repaired. To a question, he replied that the Sindh government did not own any ill industrial unit. "There are total 6,129 private industrial units are running in the province of which 690 are rice mills and 182 flour mills," he added.

The Sindh Bank denied encashment of compensation cheques which the Sindh government had provided to each family of the Shikarpur blast victims, PML-F lawmaker Imtiaz Shaikh told the house, saying that the bank administration had told the victims' families that they had been directed to deny conversion into cash.

The first raid was carried out at Omni office at II Chundrigar Road and two employees were detained. Later, the Rangers raided another office near Hockey Stadium and detained other suspects.

Rangers raid offices of Zardari’s close aide in Karachi

The raids and arrests were confirmed by the paramilitary force in a press release, which stated that an intelligence-based raid on a company’s offices at II Chundrigar Road and Hockey Stadium was carried out. “Five people were rounded up and a huge cache of arms and ammunition was also seized from the premises,” it added. “Those who have been detained include Shahzad Shahid, Rajab Ali Rajper, Ajmal Khan, Kamran Munir Ansari and Kashif Hussain.” It added that the seized ammunition comprises 17 Kalashnikovs, 4 pistols, 3,255 bullets, 9 ball bombs. The statement said legal action will be taken against the suspects and their facilitators after a complete scrutiny of weapons and documents.

Majid is a Karachi-based businessman and a close friend of Pakistan Peoples Party (PPP) co-chairperson Zardari, who looks after his businesses including sugar mills. Majid’s name came to fore for the first time after former Sindh home minister Zulfiqar Mirza revealed the relation between Zardari and Majid, alleging that Majid is a partner of Zardari in corruption deals. Reacting upon the raid, information adviser Maula Bux Chandio said that the paramilitary force did not take Sindh government and police into confidence before the raid. Speaking to the media, he labelled the raid ‘political victimisation’ of the party. “The action has been taken after federal interior minister’s remarks against PPP.”

Zardari returns to a different role

Differences with IG

Majid is also alleged to have been involved in the transfers and postings of police officers in Sindh and is believed to have played a vital role in the chief minister’s recent decision to send Sindh IG Allah Dino Khawaja on a ‘forced leave’.

A police officer, requesting anonymity, said that Khawaja had differences with the PPP leadership with regards to issues such as transfer and postings of the policemen. However, the recent differences between Khawaja and Majid emerged when the latter refused to involve the police in a dispute between sugarcane growers and millers. It became the main reason behind sending IG on a ‘forced leave’.

“They two men had a verbal spat and then Majid complained to Zardari and asked him to remove the IG,” the officer explained.

Interestingly, the matter is only not limited to transfer and postings of police officers but also relates to raids and recovery of sophisticated arms and ammunitions from a bungalow in Clifton.

Sindh govt sends IG on ‘forced leave’

During the second week of November, a huge cache of weapons was recovered when law enforcement agencies raided a house in the Old Clifton area. Eight bags full of weapons were seized from the house, which included seven M-4 rifles, six sub-machine guns, two 7mm rifles, two .223 rifles, four 12-bore, one G3, one 222 rifle and two 9mm pistols. Two police caps and two daggers were also found from the house.

According to police sources, the weapons belonged to Nisar Morai, the former chairperson of the Fisherman Cooperative Society. He was also known to be a frontman of Zardari. The police have remained tight-lipped over the weapons bust and said that the weapons were recovered from a garbage dump. A case was registered at the Boat Basin police station against unidentified persons. A source in the police department said that the police had been pressurised from publicising the news and IG Khawaja was asked not to publicise the news and return the weapons back from where they were seized. However, the IG refused to cooperate with the Sindh government.

Here are a couple of excerpts from "Playing with Fire" by Pamela Constable:

"Sugar is critical commodity in a country (Pakistan) where people consume vast amounts of sweet tea, soft drinks, and cakes, using about 4 million metric tons of sugar a year. .....Sugar is also very profitable. Pakistan is among the top five producers of sugar cane in the world, employing more than two million seasonable laborers at harvest time, and sugar refining is the second largest agribusiness after flour milling. According to National Accountability Bureau, a majority of country'd eighty-plus sugar mills are owned by political families, including Sharifs and Bhuttos, as well as members of parliament and several military-controlled enterprises."

"In Pakistan, the sugar industry is actually a political industry in which powerful politicians on all sides are involved", said a 2009 statement from the Sugar Mills Workers Federation that described how the big millers cheat mall growers through fake middlemen, then manipulate sugar prices by pressuring the government to stimulate or discourage exports depending on how much cane has been harvested."

"Throughout the 1990s, during two periods of rule by Sharifs and two by his archrial Benazir Bhutto, the privatization process became a game of grab and run. Investing of investing in solid projects, many business groups colluded with corrupt officials to make quick profits. They borrowed huge sums (from state-owned banks) without collateral, created and dissolved ghost factories, purchased state assets at token prices, avoided paying taxes, defaulted on shaky loans, or deferred paying them indefinitely....Major defaulters and beneficiaries of loan write-offs, granted by both the Bhuttos and Sharif governments, included some of Pakistan's wealthiest business families-- Manshas, Saigols, Hashwanis, Habibs, Bhuttos and Sharifs......using the National Accountability Bureau (NAB), the (Musharraf) regime (after year 2000) went to prosecute eighteen hundred cases of corruption to recover nearly $3.4 billion in assets."

The institutional structure of economy is designed to generate rents for the elite at the expense of the middle classes and the poor. So what is at stake?

http://tns.thenews.com.pk/post-panama-case-pakistan/

The hidden wealth of some of the world’s most prominent leaders, politicians and celebrities has been revealed by an unprecedented leak of millions of documents that show the myriad ways in which the rich can exploit secretive offshore tax regimes — The Panama Papers: how the world’s rich and famous hide their money offshore [The Guardians, April 3, 2016]Through the report titled, Panama Papers: Politicians, Criminal & Rogue Industry That Hide Their Cash, some of the crooks of the world — drug dealers, mafias, corrupt politicians and tax evaders — have been exposed. Pakistanis who are part of this undesirable club are unveiled through a year-long investigation project by journalist Umar Cheema in his write-up, Pak politicians, businessmen own companies abroad [The News, April 4, 2016].Post-Panama case Pakistan is emerging as a dangerous place where the government is openly protecting and patronising the convicted and accused. There is no will to end state-sponsorship of organised crimes. Notorious laws — sections 5 and 9 of the Protection of Economic Reforms Act, 1992 and section 111(4) of the Income Tax Ordinance, 2001 — are still protecting dirty money, financing of terrorism and encouraging tax evasion. In the presence of such laws, the judiciary has punished the three-time elected prime minister — an unprecedented move that can be a starting point to end mafia-like rule in Pakistan as happened in Colombia after years of power of dirty money muzzling institutions or eliminating those who were not purchasable.

------------------

How can we eliminate corruption and tax evasion in Pakistan in the presence of permanent money-laundering and tax amnesty scheme in the form of section 111(4) of the Income Tax Ordinance, 2001 that facilitates the whitening of dirty money and tax evaded funds. It ensures that for money brought into Pakistan through normal banking channels no question would be asked by tax officials or FIA. Through this section, criminals and tax evaders get their undeclared money whitened by paying just an extra 3 to 4 per cent to any money exchange dealer to get remittances fixed in their names.It is thus clear, brilliantly explained by Dr. Akmal Hussain in Restructuring for economic democracy, that “the institutional structure of Pakistan’s economy is designed to generate rents for the elite at the expense of the middle classes and the poor.” It is this structural characteristic of the economy and not just bribery that prevents sustained high economic growth and equity in Pakistan. Unless we change this structure of economy, the morbid story of corruption and tax evasion will continue. In the presence of these maladies, no decision of Supreme Court can help Pakistan progress and become an egalitarian state.

A massive increase of 35.8 per cent in per capita consumption of tea in Pakistan has been recorded from 2007 to 2016.

According to the current market situation and medium-term outlook, published by the Food and Agriculture (FAO) of the United Nations, Pakistan is among the seven countries where per capita consumption of tea has been increased.

The highest increase was seen in Malawi with 565.2pc, followed by China 128.6pc, Rwanda 110.2pc, Turkey 25.9pc, Indonesia 26.6pc and Libya 39.8pc.

Currently, black tea consumption in Pakistan has been estimated at 1,72,911 tonnes which is expected to increase to 2,50,755 tonnes in 2027, the FAO report projects. This showed in next 10 years, tea consumption will increase by 77,844 tonnes.

As a food item, milk (both milk and liquid milk equivalents) is second only to cereals in the level of per capita consumption in Pakistan ,32 which nationally is 190 litres.33 Province-wise, per capita consumption stands at 246 kg in Sindh, 132 kg in Punjab , 86 kg in North-West Frontier (NWFP) and 108 kg in Baluchistan .

USDA Pakistan Annual Sugar Report states that total per capita refined sugar consumption is estimated at 25 kilograms and it is based on improved supply and strong demand. Falling behind Pakistan are other countries of the region like India with 14 kg/person, China with 11 kg/person and Bangladesh with 10 kg/person.

Despite a generous export subsidy aimed at moving 2017/18 sugar off the domestic market, stocks continue to rise as only 1 million metric tons of sugar that are expected to be exported, well below the 2 million metric tons that were eligible for a subsidy. 2018/19 stocks are projected at 4.7 million metric tons, equivalent to nearly a full year of domestic consumption. Pakistan’s marketing year (MY) 2018/19 sugar production is forecast at 6.5 million tons, down 12 percent from the revised 2017/18 estimate as delays in cane payments and reduced expectations surrounding support pricing are prompting some farmer to switch to other crops such as cotton.

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The Lahore studio will be led by Ammar Zaeem, cofounder of Pakistan’s mobile game studio Caramel Tech which already has a team of 50 engineers.
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Cloudcade:

Founded by Di Huang in 2013, Cloudcade is known for its popular multiplayer game "Shop Heroes" that pits players against each other in a competition to create the best shop they can. If a player can make a better store and perform more tasks than his or her rivals, he or she wins.

The game is available on the Apple iOS App Store, Google Play, Samsung Galaxy Store, Amazon, Kongregate, and Facebook. It is now also supported on the Apple Watch.

43.5% of Indians, the highest percentage in the world, say they do not want to have a neighbor of a different race, according to a Washington Post report based on World's Values Survey.

About Pakistan, the report says that "although the country has a number of factors that coincide with racial intolerance – sectarian violence, its location in the least-tolerant region of the world, low economic and human development indices – only 6.5 percent of Pakistanis objected to a neighbor of a different race. This would appear to suggest Pakistanis are more racially tolerant than even the Germans or the Dutch".

Housing Discrimination:

It appears that there is a small but militant minority in Pakistan that is highly intolerant, but the vast majority of people are tolerant. My own experience as a former Karachi-ite is that there is little or no race or religion based housing segregation, the kind that is rampant in India where Muslims are not welcome in most Hindu-dominated neigh…

Pakistan's human development ranking plunged to 150 this year, down from 149 last year. It is worse than Bangladesh at 136, India at 130 and Nepal at 149. The decade of democracy under Pakistan People's Party and Pakistan Muslim League (Nawaz) has produced the slowest annual growth rate in the last 30 years. The fastest growth in Pakistan human development was seen in 2000-2010, a decade dominated by President Musharraf's rule, according to the latest Human Development Report 2018.

Human Development in Pakistan:

UNDP’s Human Development Index (HDI) represents human progress in one indicator that combines information on people’s health, education and income.

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I am the Founder and President of PakAlumni Worldwide, a global social network for Pakistanis, South Asians and their friends. I also served as Chairman of the NEDians Convention 2007. In addition to being a South Asia watcher, an investor, business consultant and avid follower of the world financial markets, I have more than 25 years experience in the hi-tech industry. I have been on the faculties of Rutgers University and NED Engineering University and cofounded two high-tech startups, Cautella, Inc. and DynArray Corp and managed multi-million dollar P&Ls. I am a pioneer of the PC and mobile businesses and I have held senior management positions in hardware and software development of Intel’s microprocessor product line from 8086 to Pentium processors. My experience includes senior roles in marketing, engineering and business management. I was recognized as “Person of the Year” by PC Magazine for my contribution to 80386 program. I have an MS degree in Electrical engineering from the New Jersey Institute of Technology.
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